Newcomer Mortgage Canada 2027: Rules, Down Payment, Credit

Published 2 November 2026 · By Jatin Dua, Broker of Record, RE/MAX Quantum Realty

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Mid-rise condo building and townhouses near a GTA suburban transit station (illustrative)

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 2 November 2026 · 9 min read — New to Canada and buying in 2027? Who can buy, 5% down newcomer programs, credit without Canadian history, GTA costs and rebates.

Short answer

Newcomers can get a mortgage in Canada in 2027 with as little as 5% down. Permanent residents and work permit holders qualify for insured newcomer programs, and lenders can accept an international credit report or a bank reference letter instead of Canadian credit history. Work permit holders need 183+ days left on their permit, and non-residents may owe Ontario’s 25% NRST.

This guide is for permanent residents, work permit holders and other newcomers who want a mortgage in the GTA in 2027. You will learn who is allowed to buy, how much you need down, how lenders handle a missing Canadian credit history and foreign income, what a typical first home costs, and which rebates you can still claim.

Can newcomers get a mortgage in Canada in 2027?

Yes. Canada’s mortgage insurers have programs built for newcomers, and they allow purchases with as little as 5% down. CMHC’s Newcomers product covers both permanent residents and non-permanent residents who are legally allowed to work in Canada, such as work permit holders. CMHC says there is no minimum period of residency.

Your status shapes the rest:

Permanent residents can use all of CMHC’s homeowner insurance products, the same as citizens.
Work permit holders can get insured mortgages on homes with one to four units, as long as they live in one unit and the purchase is not blocked by the federal foreign buyer ban.
Visitors and most students face much tighter rules, covered below.

The standard tests still apply: the stress test, debt limits of 39% of gross income for housing costs and 44% for all debts on insured loans, and the minimum down payment.

Are newcomers allowed to buy a home in 2027?

Permanent residents can buy like citizens. For others, the federal Prohibition on the Purchase of Residential Property by Non-Canadians Act and its regulations decide. Under the regulations today:

Work permit holders are exempt if they have 183 days or more left on their permit or work authorization on the purchase date, and have not bought more than one residential property.
International students are exempt only if they filed Canadian tax returns for each of the five years before the purchase, were in Canada at least 244 days in each of those five years, pay $500,000 or less, and have not bought more than one property.

The ban is currently set to end on 1 January 2027. Budget 2026, tabled in early November 2026, proposes extending it for two more years, to 1 January 2029, for existing homes while exempting new residential properties. The government said it would bring legislation and regulations “in short order”. Until that happens, it is a proposal, not law. Confirm your position with a real estate lawyer before you sign.

Provincial and city taxes are separate. Ontario’s Non-Resident Speculation Tax is 25% of the price for foreign nationals anywhere in Ontario, and Toronto adds a 10% Municipal Non-Resident Speculation Tax. Being allowed to buy under the federal ban does not exempt you from these. My guide to buying a house in Ontario on a work permit covers the exemptions and rebates in detail.

How much down payment does a newcomer need?

The same minimum as everyone else: 5% of the first $500,000 and 10% of the part from $500,000 to $1.5 million. Homes at $1.5 million or more need 20% and cannot be insured. With less than 20% down, you pay a mortgage insurance premium, which is 4.00% of the loan at 95% loan-to-value and is added to the mortgage. My guide to CMHC insurance costs in Ontario explains the full premium table and the cash due at closing.

Here is what that looks like on typical GTA starter homes.

Home (median sold price, Jan–Oct 2026)	Price	Minimum down	Insured mortgage incl. 4.00% premium	Monthly payment at 5.00%	Payment you must qualify for at 7.00%
Oshawa condo apartment	$340,500	$17,025	$336,414	$1,957	$2,356
Brampton condo apartment	$415,000	$20,750	$410,020	$2,385	$2,872
Toronto E09 (central Scarborough) condo apartment	$450,000	$22,500	$444,600	$2,586	$3,114
Mississauga condo apartment	$485,000	$24,250	$479,180	$2,787	$3,356
Markham condo apartment	$558,000	$30,800	$548,288	$3,189	$3,840
Brampton freehold townhouse	$755,000	$50,500	$732,680	$4,261	$5,132

Source: TRREB MLS data via REALM, January–October 2026 (municipal and district medians, not building prices); CMHC premium schedule; my calculations, 25-year amortization, semi-annual compounding. The 5.00% rate is an assumption for illustration, not a quote.

Where the money comes from matters. CMHC accepts savings, the sale of a property or a non-repayable gift from a relative. Sagen’s New to Canada program also accepts RRSP withdrawals and existing home equity. Budget separately for closing costs, including land transfer tax.

To see what price range your income supports, try the affordability calculator below.

Free tool — what can you actually afford?

Can you get a mortgage without Canadian credit history?

Yes. At least one borrower or guarantor generally needs a credit score of 600, but CMHC says that with limited Canadian history it may accept an international credit report, a reference letter from your bank in your home country, or other ways of showing you manage credit well.

Sagen’s New to Canada program spells out the options clearly. Without enough Canadian credit, it can accept:

An international credit bureau report
Twelve months of bank or billing statements showing steady payments, such as rent, utilities, phone, car insurance, childcare or regular savings
A reference letter from a recognized financial institution about your banking history
For loans at 90% of value or less, six months of statements from your main bank account

Even so, start building Canadian credit as soon as you arrive. A card used lightly and paid in full each month, plus rent and phone bills paid on time, gives lenders something to read. My guide to credit scores for a mortgage in Canada explains what lenders look at.

How do lenders treat a newcomer’s income?

Mostly the same as anyone else’s. Sagen says standard income and employment verification applies, so expect to prove your Canadian income the usual way. A few points are specific to newcomers:

Debts back home count. Sagen requires all debts held outside Canada to be included in your total debt ratio.
Rent from a property abroad does not count. Sagen excludes rental income earned outside Canada from its debt ratios.
Your status must be documented. Lenders keep a copy of your valid work permit or proof of permanent residence.

If you are on probation in a new job, ask the lender how it treats that before you shop.

What does the stress test mean for a newcomer’s budget?

You must qualify at the greater of your contract rate plus 2 points or 5.25%. In the table above, a 5.00% mortgage is tested at 7.00%, so the payment you must qualify for is about 20% higher than the payment you would actually make.

On insured loans, CMHC caps housing costs at 39% of gross income and all debts at 44%, both worked out at the qualifying rate. A car loan or student loan can shrink your approval quickly. If you can, pay down or avoid new debts in the months before you apply.

Which first-time buyer rebates can newcomers use?

Program	Value	Newcomer rule to know
Ontario land transfer tax refund for first-time buyers	Up to $4,000	Citizens and permanent residents only, but you can apply within 18 months of registration if you become one in that time. You cannot have owned a home anywhere in the world.
Toronto municipal land transfer tax rebate	Up to $4,475	Same idea: if you become a citizen or permanent resident within 18 months of the transfer, you may apply.
First Home Savings Account (FHSA)	$8,000 of room in your first year, tax-deductible	You must be a resident of Canada, 18 or older, and a first-time buyer. A home you owned and lived in abroad in the current or previous four years counts against you.
Ontario NRST permanent resident rebate	The 25% tax paid	May be available if you become a permanent resident within four years of registration, subject to conditions.

Source: Ontario Ministry of Finance (land transfer tax refunds and NRST pages); City of Toronto MLTT rebate page; Canada Revenue Agency FHSA eligibility page.

My FHSA guide explains how to use the account alongside your down payment.

What mistakes should newcomers avoid in 2027?

Signing before checking the ban and the taxes. A firm offer you cannot legally complete, or one that triggers a 25% tax, is the costliest mistake there is.
Moving money at the last minute. Lenders ask where the down payment came from. Transfer funds early and keep every statement and transfer record.
Taking on new credit before closing. A new car loan or card can change your ratios after approval.
Treating a pre-approval as a guarantee. It is not. The lender still has to approve the property and confirm your documents.
Buying without seeing the area in winter. Commutes and transit look very different in February.

My take

In my view, most newcomers do best when they rent for the first months, build Canadian credit, move their down payment early and get a real pre-approval from a lender with newcomer experience. Then I help them choose an area by commute and budget, not by what friends paid two years ago. Prices in many GTA areas were lower in 2026 than in 2024, which gives patient buyers more choice.

Watch out

The foreign buyer ban may change in 2027. Budget 2026 proposes an extension with an exemption for new homes, but the details were not law when this was written. If your status is anything other than citizen or permanent resident, get written advice from a real estate lawyer on the ban, the NRST and the Toronto MNRST before you make an offer.

What to do next

Confirm your status and permit dates, and get a lawyer’s view on whether you can buy and what taxes apply.
Gather your credit evidence: an international credit report, a bank reference letter and twelve months of bill and rent payments.
Move your down payment into a Canadian account early and keep every transfer record.
Get a pre-approval from a lender or broker who regularly works with newcomers.
Choose two or three areas that fit your commute and budget, and start viewing homes.

Need help with this? Talk to me.

I’m Jatin Dua, Broker of Record at RE/MAX Quantum Realty, and I’m the best agent to do this kind of work for you in Toronto and across the GTA. Over $100 million in GTA sales and 100+ families helped sell. Feel free to contact me any time: call or text 833-330-1925 or email [email protected].

Book a free call Call 833-330-1925

Frequently asked questions

Can a newcomer get a mortgage in Canada in 2027?

Yes. Permanent residents and work permit holders can get insured mortgages with as little as 5% down through the CMHC Newcomers and Sagen New to Canada programs, with no minimum time in Canada at CMHC. You still need to pass the stress test, meet debt limits, prove your income and be allowed to buy under the federal foreign buyer ban.

How much down payment do I need as a new immigrant in Canada?

The same as anyone: 5% of the first $500,000 and 10% of the portion up to $1.5 million, with 20% at $1.5 million or more. For a $485,000 Mississauga condo, the median price in 2026, that is $24,250 down. With under 20% down, a mortgage insurance premium is added to the loan.

Can I get a mortgage without Canadian credit history?

Yes. CMHC may accept an international credit report, a reference letter from your bank back home or other proof of good credit habits. Sagen also accepts twelve months of bank or billing statements showing steady rent, utility or phone payments. Building Canadian credit early still gives you more lender choice in 2027.

Can I buy a house in Canada on a work permit in 2027?

Usually yes. Work permit holders are exempt from the federal foreign buyer ban if they have at least 183 days left on the permit when they buy and have not bought another residential property. Ontario’s 25% NRST and Toronto’s 10% MNRST still apply to foreign nationals unless an exemption fits, so check with a lawyer.

Is the foreign buyer ban ending on 1 January 2027?

It is scheduled to, but Budget 2026 proposes extending it for existing homes to 1 January 2029 while exempting new residential properties. As of November 2026 that is a proposal, and the government said it would bring legislation and regulations soon. Ontario’s NRST and Toronto’s MNRST are separate taxes and are not part of that federal proposal.

Do newcomers pay more for a mortgage in Canada?

Not necessarily. Sagen’s New to Canada program uses the same premium rates as standard insured loans, such as 4.00% of the loan at 95% loan-to-value. Your interest rate depends on the lender, your down payment, your credit evidence and your income, so compare several lenders and ask each for a written rate in 2027.

Can newcomers claim the Ontario first-time buyer land transfer tax refund?

Yes, once you are a citizen or permanent resident. Ontario’s refund of up to $4,000 is limited to citizens and permanent residents, but a buyer who becomes one within 18 months of registration can still apply. You must never have owned a home anywhere in the world. Toronto’s rebate of up to $4,475 has a similar 18-month rule.

Do lenders count my income and debts from my home country?

Debts, yes; foreign rental income, generally no. Sagen’s New to Canada program requires all debts held outside Canada to be included in your total debt ratio and excludes rent earned outside Canada. Expect standard income checks on your Canadian earnings in 2027, and tell the lender about every debt you still carry abroad.

Can a newcomer open an FHSA?

Yes, if you are a resident of Canada, at least 18 and a first-time home buyer. The CRA counts a home you owned and lived in outside Canada in the current year or the previous four years, so some newcomers do not qualify right away. First-year contribution room is $8,000, and contributions are generally tax-deductible.

Sources

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